Advice for negotiating relocation packages? (Boston: hotel, house, to buy) - Massachusetts (MA) - Page 3 - City-Data Forum

Patapsco · 10-16-2007, 01:27 PM

Thanks again for your replies and encouragement.

Parsec and Smarty... I don't know whether to laugh or cry at what you said.

The good news: heating bills aren't that bad...
The bad news: if you set it at 50 or 60 at night?!!?

And Parsec, your appt. sounds lovely. yikes. How is Newton with kids? I forget how old yours is? Is this something we should consider? I hate to give up a SFH and yard, but I guess we might need to...

Breezy & Magic: thanks very much for the encouragement and better news. I am PSYCHED you guys were offered what you were, both for your sakes and ours....
although 6 weeks... yikes...

Thanks again, & will let you know how it goes. We're supposedly going to hear what the official relo pkg is tomorrow, I guess, and go from there.

findingmesomeday · 10-16-2007, 02:18 PM

You learn to live with setting the thermostat back to 55 or 6o at night and no more than 65 for getting up/getting dressed, back down to 60 while everyone is gone, back up to 65 in the evening, back down to 60 at night. Invest in those programmable setback thermostats. They will save you money because you won't have to keep remembering to set the thermostat. We have 5 (yes 5) heat zones in this stupid house and there's no way I want one iota of heat to escape.

If your windows are not double-paned, invest in new ones or buy that plastic that looks ugly but does the trick in sealing out winter drafts.

Heating bills are outrageous. Electricity goes up in the winter too because it's dark all the time.

You are correct about cost of living. We moved from Seattle to NoVa and it was about a push. We moved up here; hubby got an additional 35% more salary and we became instantly poor.

Patapsco · 10-16-2007, 03:50 PM

Wow, I am starting to get REALLY depressed.

Parsec · 10-17-2007, 07:50 AM

I think a lot of these families getting squeezed are the ones who didn't buy a house before the turn of this century and therefore don't have the equity from appreciation that many other families do. i'd say if you have a $90-120k household income w/at least $100k of house equity you should be able to support a family of 4 pretty comfortably (i.e. buy your kid an ipod w/o calculating if you can afford it or not), but that's just in my opinion. however, if you're making $120k and are a first time homebuyer w/only a 10% down payment and you have to take out a jumbo loan (i.e. $417k or higher) then you are HOUSE POOR.

the good thing about renting is, i get to set my thermostat at 74 in the winter since heat and hot water is included in most rentals. i also don't worry about yard work and shoveling. also, my $1225/mo rent (plus $140 for cable/phone/internet/electricity) is probably half of what it would cost in mortgage/insurance/taxes/maintenance/utilities if i bought my own place. this is just for the short-term since the cost of renting to buying is still out of whack in most places inside 128. it's not that i can't afford to buy; i just choose to rent since i think it's a better deal right now for a young family. once kid #2 rolls around, kid #1 is entering school, and my savings is fat (we're banking over a grand a month just from renting), i'll buy my own place in about 2 years.

my kid's only 14 months, so it's still pretty easy to just stick her in the stroller and go anywhere. i like newton though in general. much of the housing here is multi-family and you can give up the SFH and still have a yard -- you'll just share it w/your attached neighbor. i grew up in a single family so i didn't like it at first, but i got used to it. again, this is just my opinion -- i wouldn't recommend making any decisions based solely on what we tell you. it's always best to experience new things yourself and then decide yourself.

smarty · 10-17-2007, 08:34 AM

Quote:

Originally Posted by Patapsco

The good news: heating bills aren't that bad...
The bad news: if you set it at 50 or 60 at night?!!?

Yes. I have friends that set their the temp to 40s at night. It is great to snuggle with your mate at night... it creates so much more intimacy

Parsec is right. The housing bubble grew big... and not in-line with salary increase. Those with equity will most like sit for a while in hope the economy improves. Many people moving here are executives with bonus and stock options. Many can put down 20-50%. With the recent credit crunch, prices have already went down between 5-15% from last year.

If there is another BIG hit, the price can go down another 5-10% easily. Good thing(?)... there is a war and many defense contractors like Raytheon is hiring. They got BIG contracts... life is good! Also, there are so many students in MA, the economy will continue to be strong as long as mom and dad support them. The biggest concern is still in Manufacturing due to cost. Bio-tech/Pharmaceuticals will be a concern in 3-5 years as pipeline dries up and many research are moving to India. As to the finance industry, life is still good if you are at the top... there are pressure but bonuses are great! Morgan Stanley CEO got $40mil in 2006, Goldman Sachs said in its full-year earnings report that overall compensation this year was about $16.4 billion, or an average of about $622,000 per employee. Lehman said it would pay its employees an average of $335,441. I'm not sure what State Street (one of the largest employer in MA) bonuses were... I'm sure they did well....

findingmesomeday · 10-17-2007, 02:25 PM

We did have an income of over $120K in the late 1990's and by 2002 we had over $100K equity in our house. Then my husband lost his job (and his mind---he got very depressed) and the economy was so bad post 9-11 that he had to completely leave his line of work just to make any money. I was working PT because it didn't pay to put 3 kids in daycare FT and we just couldn't stem the cash flow runoff into debt.

We sold our house last Feb and almost a fire sale price just to unload it before the bank got any ideas about foreclosure. We then paid off/down a lot of debt we'd run up in the 5 years' previous. Until 2002, we had perfect credit rating and little to no debt. After we paid the first and second mortgage and our debts, we don't have a lot of money left over for another house. We live in a rental and personally, I hate it, but that might just be the situation we're in.

Patapsco · 10-18-2007, 07:24 AM

NC - Wow, I'm so sorry to hear your story! That is horrible. I'm glad you're coming out the other side, though. Definitely a life lesson here about preparing for that rainy day.

Parsec - I think we're going to need to schedule some play dates! My son is 13 months.

Thanks also everyone for all the added information. There are limits to how low we can keep it in the house w/2 toddlers. Also, we're here most of the time, so not practial to turn it back when we leave, like when I was still wroking pre-kids... but obviously will be investing in some good long underwear!

Talk to you all soon and thanks again,
K

Patapsco · 10-18-2007, 07:26 AM

ps: Don't worry, we're definitely going to be driving around checking areas out. The internet is great, but there are limits!

Renting until school age is sounding like a better and better idea, but I think we might lose on the tax end of that... not sure will have to research that.

Thanks again,
K

Parsec · 10-18-2007, 08:56 AM

Quote:

Originally Posted by Patapsco

ps: Don't worry, we're definitely going to be driving around checking areas out. The internet is great, but there are limits!

Renting until school age is sounding like a better and better idea, but I think we might lose on the tax end of that... not sure will have to research that.

Thanks again,
K

As for the regular mortgage interest and real estate tax deductions -- they're not as big as most people think. Your standard deduction's already over $10,000. Most families only have a few thousand itemized deductions besides their housing payments (let's say $4000). If you have a $400k house w/a $320k mortgage, then your interest payments will be around $20,000/year in the first few years plus around $5000 in taxes. That's not an extra $25,000 you can deduct a year though -- it's actually $25,000 minus $6000 (which is $10,000 less $4000) = $19,000. So if you're in the 25% tax bracket, that's a bottom line of $4750, which is equivalent to about $400/mo you'll be saving if you buy instead of rent. But how much more is your mortgage going to be? The mortgage/taxes/insurance on that place is $2500 per year (w/6.5% fixed 30-year mortgage). I think you can rent a comparable place for around $2000-2500 per month.

Hmm, I guess if you're in the market for a SFH then it might actually be better to just buy than rent (just based on the rambling tax calculations I did). But if you're willing to rent in a duplex or triple decker, then renting would be cheaper. I think I'm just confusing you even more; I'm sorry. I forgot the AMT. If you're going to be hit w/the AMT, it might be a good idea to "hide behind your house." But that brings another complex calculation to the table -- too much for me to think about right now.

findingmesomeday · 10-18-2007, 10:19 AM

I wish we were coming out faster than we are. Together, our salaries are comfortably over the six figure mark, yet after rent, food and utilities, then outstanding debts, there isn't a whole lot left over for extras. Three out of the last 5 months had me digging in to our meager left-over equity for more than $1000 each time. Yikes.

We had gas heat in our last home and oil in this rental. We moved in with a full tank. Landlord picks up 20% of bills because he has a storage space attached to the house (separate entrance) that he heats and cools. Ok, fine by me. The full tank of oil was about $625--we owe 80% of that. That's about 250 gallons. I've turned on the heat about 3 times (I had him install set-back programmable thermostats because we have so many heat zones) on the colder nights and the oil company came by yesterday to top off the tank for a total of 25 gallons! And it's been warmer than average for October!

The electric bill for Sept (reflecting a very hot humid Aug/Sept) was $267 (a/c). The gas bill is minimal--we cook with gas and the hot water heater is gas and that's about it.

So I was looking forward to dumping about $700 back into our savings account on payday this week. Instead, I'll be giving $500 to the landlord.

One of these days I'm going to look in that savings account and the money will be.....gone.